Is the budget decided democratically?
The EU budget is decided democratically!
- The European Commission first proposes a draft annual budget.
- The draft budget must be approved by national governments in the Council of the EU and by the directly elected European Parliament.
- Both the Council and Parliament can amend the draft.
- The Council and Parliament approve the final version.
How big is the EU budget?
At some €148 billion (2019 figure), the EU budget is in fact smaller than the budgets of Austria or Belgium.
This was a tiny fraction (2%) of the combined national budgets of all EU countries (€7,524 billion) in 2019.
- National governments in the EU spend more than 50 times what the EU does through its budget;
- EU spending represents less than 1% of the total value of the EU economy (Gross National Income of all EU Member States);
- By contrast, an average national budget in the EU is 46% of the value of its economy.
And a contrast
Unlike national budgets, which are mainly used to provide public services and fund social security systems, the EU budget is primarily used for investment.
The average EU citizen pays €240 per year towards the EU budget (2018 figures) – less than the price of an average cup of coffee per day.
How much is spent on farming?
In 2018, the share of EU spending on farming was 37%. In 1985, 70% was spent on farming. Over the past two decades, 13 countries — most of them with large farming sectors — have joined the EU. However, the Common agricultural policy budget has not risen to cover these extra costs. In fact, spending continues to fall. For 2021-2027, the Commission proposed to dedicate less than 30% of the EU budget to agriculture. Its relatively large share of the EU budget is justified; it is the only policy funded almost entirely from the common budget. This means that EU spending replaces national expenditure to a large extent.
How much is spent on administration?
The EU's administrative staff is relatively small:
- there are around 60,000 EU civil servants and other staff, who serve some 500 million Europeans (and countless others around the world).
- by comparison, the French Finance Ministry has around 140,000 staff.
The EU spends less than 7% of its annual budget on administration. This includes staff salaries and pensions, schools for children of staff members, buildings, etc.
This type of spending is unavoidable if the EU institutions are to function effectively.
How much is spent on translation, and why?
Administration also includes language services – mainly interpreting and translation – that are essential for guaranteeing the EU's cultural and linguistic diversity. These services ensure, among other things that:
- people living in the EU have access to EU laws and key political documents in an official language of their country;
- European citizens are able to write to the Commission and receive a reply in their own language;
- EU summits and meetings of the EU Council can be interpreted into and out of all official EU languages;
- every MEP has the right to use their own language when speaking in the European Parliament.
Translation and interpreting in all EU institutions account for less than 1% of the EU's annual budget – equivalent to around €2 per person per year.
Do EU staff members pay taxes or pension contributions?
They pay taxes of between 8% and 45% on their salaries.
They also pay a special levy of 6-7%, which goes back into the EU budget and is effectively returned to EU governments in the form of funding for projects.
EU Commissioners pay almost 45% of their salary on taxes.
EU staff members pay some of the highest pension contributions in the EU compared to civil servants in some Member States (10% of gross basic salary).
Civil servants in Germany, Bulgaria, Estonia and Sweden, for example, do not pay any pension contributions at all.
Have auditors signed off the accounts?
High standards of management and control apply to EU taxpayers’ money. In fact, the EU budget is one of the most controlled budgets in the world. Audits and controls are always carried out in a transparent manner by the European Commission, Member States and other organisations. When weaknesses are found, the EU is quick to address them.
The European Court of Auditors (ECA) is the European Union’s independent external auditor. It has given a clean bill of health to the EU accounts every year since 2007.
Every euro the EU spends is recorded in the books and accounted for.
The level of error presented by the European Court of Auditors in relation to the EU budget has decreased in recent years to 2.6% in 2018 (compared to 2.4% in 2017, 3.1% in 2016, 3.8% in 2015 and 4.4% in 2014) and is now close to the threshold of 2% below which the ECA would give a full approval of the expenditure. This reflects the increased efforts of the European Commission and the Member States to improve financial management.
What is done to ensure money is not wasted?
Since almost 75% of EU spending is managed jointly by both the EU Commission and EU governments, those governments share the responsibility for minimising errors. The Commission is working closely with them to ensure money is spent effectively and efficiently.
For its part, if the Commission detects that EU money has been spent incorrectly, it takes action. In 2018, for example, on funds disbursed to recipients across the EU and beyond €3.2 billion in funding was either recovered by the Commission or redirected to other projects.
Is there any fraud?
In fact, fraud affects approximately 0.2% of the total EU budget. The Commission takes a zero tolerance approach to fraud. For many years, it has had in place an anti-fraud strategy to improve the prevention, detection and sanctioning of fraud. For instance, the Early Detection and Exclusion System Database allows for the exclusion of unreliable persons and entities from EU funding.
The Commission and the European Court of Auditors report all suspicions of fraud with EU money to the European Anti-Fraud Office (OLAF). In 2020, a new European Public prosecutor office’s (EPPO) will be responsible for combating serious cross-border crime, including fraud, corruption and VAT fraud affecting the EU budget.
Is the Commission planning to introduce direct taxes?
No – the Commission has never proposed this. National governments and local authorities are and will continue to be in charge of setting and collecting taxes.
It is true that the EU is currently looking at some possible new ways of financing the EU budget, which could support EU policies, for example the contribution based on non-recycled plastic packaging waste.
But none of these could be approved without unanimous agreement by all EU governments and parliaments.
Why do some EU countries pay more than they receive?
Although some countries' contributions are bigger than others, every Member State enjoys the benefits of the EU budget.
In addition to living in a continent where people can move freely through 27 countries, companies small and large have free access to a market of 500 million consumers.
Better roads in Spain mean a French truck driver can deliver its products to consumers in a faster and safer way. European research programmes bring together the best minds in the continent to work on solutions to major societal issues.
In times of natural disasters, Member States are there for each other. Put simply, by having this 'collective money pot' the EU is in a position to take on challenges which individual countries alone would never be able to.
Does EU funding only help poorer EU countries?
EU funding for regional and social development is an important source for key investment projects. In some EU countries that have otherwise limited means, European funding finances up to 80% of public investment. However, EU regional spending does not just help poorer regions. It invests in every EU country, boosting the economy of the EU as a whole. It is estimated that the return on investment by 2023 will be €2.74 for every €1 invested between 2007 and 2013 — a 274% return.
For 2014-20, the EU allocated over €460 billion to regional spending. This should result in (data from end of August 2019):
- help for over 1.1 million companies;
- better healthcare for 44 million Europeans;
- flood and fire prevention for 27 million people;
- nearly 17 million people connected to sewage plants;
- broadband access for 14 million additional households;
- over 420 000 new jobs in companies;
- new, modern schools and childcare for 6.9 million children.
Should there be an EU budget?
The EU budget is based on the idea that in some areas a euro spent by the EU is worth more for the common European good than a euro spent nationally.
- EU countries can achieve much more together than on their own. Big projects such as Galileo (the EU satnav system) could not be financed by one country alone.
- Since the 2008 financial crisis, the EU has struggled with low levels of investment. In 2014, the EU launched the Investment Plan for Europe, which aimed to get Europe investing again by mobilising private and public investment. The investment plan will run until 2020 and aims to mobilise €500 billion. This boost for jobs, growth and investment would not be possible without the EU budget.
- Many current problems are global in nature – e.g. migration, humanitarian crises, terrorism, security threats. Such problems cannot be tackled effectively by single countries acting alone.
The EU budget contributes to:
- safer, healthier food;
- better infrastructure (new and better roads, railways and airports);
- a cleaner environment;
- tighter security at EU external borders;
- increased student mobility;
- educational support and guidance;
- social protection and cultural exchanges;
- humanitarian aid worldwide.
Does it fund only useful projects?
The Commission is serious about ensuring that the EU budget is focused on priorities and well spent.
Projects are selected either directly by the Commission or by national and regional authorities in EU countries, third countries, and international organisations to meet local needs, in line with strategies and priorities they have agreed in advance with the Commission.
In the past, the focus has often been on simply using the funds and playing by the rules. Now the focus is put more and more on performance. Today, demand for EU funding is rising and in many Member States the EU budget is a key source of investments. The pressure is greater than ever to make sure EU money is spent well. A euro spent through the European budget must be worth more to our citizens than a euro spent at national level. The EU budget has to demonstrate added value.
Can I receive money from the EU?
All European citizens and many in other parts of the world benefit directly or indirectly from the EU budget.
It helps millions of students, thousands of researchers and many cities, regions and non-profit organisations. Some examples:
young people benefit from Erasmus+, which provides grants for activities in education, training, youth and sport. They also benefit from the European Solidarity Corps and the Youth Guarantee.
researchers benefit from partial-financing
Partial financing for researchers
farmers receive aid to bolster their income, as well as environmental funding from the European Agriculture Fund for Rural Development and LIFE programme.
small and medium businesses benefit from grants, loans and in some cases guarantees, as well as better access to finance and markets under the COSME programme.
In 2017, rules to access EU funds have been simplified and modernised. The recently approved measures will ensure:
- less red tape for beneficiaries/simpler rules;
- more transparency;
- better controls and accountability (to ensure public money is used more efficiently).
To search and apply for funding opportunities, go to our Funding and tender opportunities portal.